Amazon profit jumps while shares slip

Amazon said its Alexa digital assistant was a major part of its strategy as the US tech giant reported strong gains in profits and revenues. Photo: AFP

Amazon on Thursday reported its profit in the past quarter surged on strong holiday retail sales and its soaring cloud computing business.

The US tech giant said profit jumped 63% from a year ago to $3 billion in the fourth quarter as revenues increased 20% to $72.4 billion.

The results reflected growth in Amazon’s ever-expanding online retail operations as well as its large cloud computing division, known as Amazon Web Services.

Shares, however, slid 5.4% to $1,625 in after-market trades that followed release of the earnings results.

“I’m guessing a lot of people expected really good results, and as soon as they saw them sold and took the profit,” said independent analyst Rob Enderle.

“It looks like Amazon had a stellar quarter.”

Chief executive Jeff Bezos highlighted the role of Amazon’s digital assistant Alexa as the company moves into infusing artificial intelligence into its smart speakers and other devices in a race for dominance in the “internet of things” market.

“Alexa was very busy during her holiday season,” Bezos said in the earnings release.

Bezos pointed to the Amazon-branded Echo speakers that are at the heart of the new strategy.

“Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year,” he said.